Tax Saving Instruments

Tax Saving Investments (Under Section 80C, 80D, 80 CCC and 80 CCD)

There are multiple tax saving instruments available under section 80 C, 80D and 80CCD of Income Tax Act, 1961. Income tax Planning will not be possible unless and until you are aware of these three sections of the Income-tax Act.

Most of the investors are aware of the benefits available under section 80C, however, there are many other investment options that need to be taken care of while planning your taxes.

SECTION 80C, Income Tax Act (1961)

Individuals and HUF can reduce their taxable income up to 1.5 Lakhs by investing in any of the eligible 80C Tax Saving options mentioned below:-

  1. ULIP
  2. National Pension Scheme
  3. Life Insurance
  4. ELSS Mutual Funds
Section 80 CCD. Income Tax Act (1961)

Tax Benefits are available under sections 80 CCD (1) AND 80 CCD (2) in case of investments in NPS or the National Pension Scheme. 1. 80 CCD (1)

a.   Maximum deduction permissible is 10% of the annual salary (Basic + Dearness Allowance), in case of a salaried individual and 20% of the gross total income or 1.5 Lakh whichever is less in case of non-salaried individuals. 2. 80 CCD (2)

a.   If the Employer contributes to the NPS on the employee’s behalf, then the employee can claim deduction under section 80 CCD (2) up to 10% of the Salary. 3. 80 CCD (1B)

a.    Additional deduction of Rupees 50000 is permissible if the amount is deposited in the Tax Payer’s NPS account.

SECTION 80 CCC. Income Tax Act(1961)

You can avail benefit under this section up to rupees 1.5 lakh by investing in an annuity or a Pension plan.

According to Section 80CCE, the maximum tax benefit that is allowed under section 80 C, 80 CCC and section 80 CCD is rupees 1.5 Lakhs.

SECTION 80D, Income Tax Act (1961)

You can also invest in Health Insurance / Medical Insurance to avail tax benefit under section 80D of Income Tax Act, 1961. The following table illustrates how you can invest premiums in medical insurance to avail Income Tax benefits for the financial year 2018-19 or assessment year 2019-2020.

S.NoInsured PersonExemption Amount
1Family and Self25000
2Family, Self, and Parents25000 + 25000 = 50000
3Family, Self, and Senior Citizen Parents250000 + 50000 = 75000
4Self(Senior Citizen) and Senior Citizen Parents50000 + 50000 = 100000